U.S. Supreme Court to hear PPL Montana hydro case

The United States Supreme Court announced June 20 that it will hear PPL Montana's appeal of a Montana Supreme Court decision that granted the state ownership of riverbeds underlying certain PPL Montana-owned dams, retroactively going back to statehood.

"We welcome the Supreme Court's decision to take up this case because of the broad implications it has for water users throughout the West," said Robert J. Grey, senior vice president, general counsel and secretary of PPL Corp.

In May, PPL Montana was ordered by the Montana Supreme Court to pay the state $40 million in current and past rent for the use of riverbeds where the utility's hydroelectric dams sit.PPL Montana has recorded a total loss accrual of $78 million at March 31, 2011, that includes the original judgment of the Montana courts plus the company's estimate of interest and rent that has accrued since the state court's ruling.

Grey said the case raises federal issues that affect the rights of streambed users including hydroelectric plant operators, ranchers, irrigators, cities, dock owners, recreationalists and federal landholding agencies.

"The diverse support PPL Montana received to get this case on the high court's docket shows the importance and potential consequences of this issue to many parties across the West," Grey said. "Many water users, water use associations and industry organizations — including the Montana Farm Bureau Federation, the Montana Water Resources Association, the Edison Electric Institute, the National Hydropower Association and others — have supported this appeal."

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